The Evolution of BitTorrent’s Legality

A total number of active monthly users on BitTorrent is estimated to be more than a quarter of a billion. At any given instant, it is claimed BitTorrent has more users than YouTube and Facebook combined. Approximately 70% of all internet traffic is BitTorrent peer-to-peer (“P2P”) activity.

The popularity of BitTorrent has made it a natural choice for pirates looking to illegally distribute copyrighted material. From 2010-2012 more than 250,000 people were accused of illegally downloading movies off the internet using BitTorrent. Record companies, music production companies, the software industry and more are now pursuing people who use BitTorrent to download their copyrighted material.

In this article we will detail how P2P programs have evolved in response to legal liability for their creators, and we will end with showing how the users of BitTorrent are hauled into court. While downloading copyrighted material on BitTorrent may seem like the easiest option, it is always easier and cheaper in the end to buy the material in the first place.

Napster – First Generation File Sharing

Napster was the first program that facilitated widespread P2P file sharing. Napster provided a central server that allowed users to find other users who had the files they wanted to download. The user would then download the requested file directly from the other user that had it on their computer.

In the first major case to address legal liability for copyright infringement committed via P2P file-sharing, the Ninth Circuit Court of Appeals found the creators of Napster liable for contributing to their users’ copyright infringement. The court focused on Napster’s failure to filter its servers to remove copyrighted material. The court ruled that since Napster controlled their central servers, Napster had the right and ability to supervise the downloading occurring through their servers.

Grokster – Second Generation File Sharing

The founders of the “second generation” P2P programs, such as Grokster and Kazaa, learned from the Napster ruling and created networks that did not run from a central server. Users were able to trade files directly between each other and the creators of the programs hoped to avoid liability because, in contrast to Napster, they could not control what their users shared.

Grokster would assign users as “supernodes,” who acted as a central server for all file-sharing requests to pass through. The users designated as “supernodes” could change from day to day.

The United States Supreme Court unanimously held that the creators of Grokster were liable for contributory infringement because they intended to bring about infringement by distributing a device suitable for infringing use that actually facilitated infringement.

Grokster’s creators were liable because they profited from their user’s infringement through advertising and also because they took active steps to encourage infringement by their users.

BitTorrent – Third Generation File Sharing

BitTorrent is now the “third generation” and dominant P2P file-sharing application used on the Internet because it can transfer large amounts of data quickly and cheaply. BitTorrent facilitates the transfer of large files by breaking down data into smaller pieces and sending those small pieces to downloaders requesting the file. Once the leaches get all the pieces of the file they desire the file is reassembled as a whole.

Everyone involved in sending and receiving pieces of one file is a member of the same “swarm.” Users in a swarm with 100% of the data are called “seeders,” while everyone else trying to acquire 100% of the data is called a “leech.” Like Grokster, BitTorrent does not require a central server. BitTorrent allows users to transfer files to other users in the “swarm,” instead of directly from the file distributor.

Courts have not yet determined whether the creators of BitTorrent are liable for contributing to copyright infringement, but if this question was before a court they would likely focus on whether BitTorrent’s creators intend for their users to commit copyright infringement. The creator of a company similar to BitTorrent, isoHunt, was recently found liable for copyright infringement by the Ninth Circuit Court of Appeals.

While the liability of BitTorrent’s creators may still be an undecided legal question, there is no question that the people who use BitTorrent to download copyrighted material without permission are liable for copyright infringement.

BitTorrent Users Are Liable For Copyright Infringement

While transmitting and receiving data from a torrent, each computer leaves its fingerprint in the form of its IP address. Attorneys then go to court to subpoena the internet provider for the IP address to get the name of the person behind the IP address.

Copyright holders are now attempting to assert claims against unknown defendants who are only identified by their IP addresses, and then joining large numbers of those defendants into single legal actions. The defendants are only identified as “John Doe” until the copyright owner requests early discovery and leave from the court to subpoena the defendants’ Internet Service Providers (“ISP”) to identify each John Doe.

Under Federal Rule of Civil Procedure (FRCP) 20(a) parties may be joined in one action if their potential liability arises out of the same transaction or occurrence. Copyright holders are joining together all members of a BitTorrent “swarm” are engaging in the same transaction.

Some courts have decided that cases involving huge number of “John Doe” defendants are an improper use of the legal system because they lump very different factual scenarios together into one case and use one filing fee to pursue a suit, instead of paying hundreds or thousands of filing fees. Many courts, however, have permitted this type of joinder.

Whether or not defendants are allowed to be joined in large numbers, users will eventually be found liable if they downloaded a copyrighted work without permission. Copyright liability can be very expensive and if a court determines you are liable for willful infringement the judgment amount is not dischargeable in bankruptcy.

Some people have called this type of litigation “trolling”, meaning that the troll demands a payment to cross his bridge. The truth is there appear to be some unscrupulous companies and lawyers abusing the system. Many cases, however, are legitimate.

Could you be next?

If you have been sued for copyright infringement via BitTorrent do not ignore it. Hire a lawyer who is an expert in intellectual property. After consulting with your lawyer, you may very well come to the conclusion that settlement before trial is your best option. Further, John Does in these situations are liable for attorney’s fees, so fighting a claim just for the sake of fighting it can be very expensive.

If you use BitTorrent to download copyrighted material, stop doing it. There is a real risk that you will be identified, sued in federal court, and in the end forced to pay much more than it would have cost you to just buy the material in the first place instead of downloading it.

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Copyright Cow™ is the Blog and alter-ego-Blogger name for Timothy B. McCormack, attorney at law, a well established and successful Seattle-based intellectual property, technology and business lawyer. You can also follow Copyright Cow on Facebook

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The Seattle Post intelligencer “Copyright Cow” Column focuses on the untold stories of the second largest export of the United States – intellectual property and technology – through the lenses of law, economics and society. Intellectual property is comic books, cartoon characters, the “Book of Life” embodied in the Human Genome, medicine, technology, movies, websites, and, for example, the business of producing and distributing milk (a Copyright Cow favorite).

Timothy B. McCormack, attorney at law, and Seattle based technology and copyright lawyer writes the blog to help educate and raise awareness of some of the most important economic and legal issues of our time – intellectual property. Timothy B. McCormack founded McCormack Intellectual Property Law PS